Tata Steel’s Resumption of Iron Ore Mines Might Pressurize Domestic Pellet Prices

With Jharkhand HC allowing the steel giant to resume its operations at its Noamundi Mines, its sourcing from merchant market would reduce, which might lead to further fall in pellet prices.

Tata Steel raised its procurement of iron ore and pellet drastically after Jharkhand HC stopped dispatches from its Noamundi Mines. The steel giant loaded 93 rakes (47 rakes of iron ore and 46 rakes of pellet) in Sept’15 against 34 rakes (17 rakes of iron ore and 17 rakes of pellet) last month.

It also raised its iron ore sourcing from Odisha mines, loaded 30 rakes in Sept’15 against 3 rakes in Aug’15. Procurement of iron ore from other mines remained almost same. The steel biggy sourced 10 rakes from Rungta Mines and 7 rakes from NMDC.

Tata Steel’s pellet sourcing nearly tripled in Sept’15

The steel giant procured 46 pellet rakes in Sept’15 in comparison with 17 pellet rakes in Aug’15. Major source was Jindal Steel & Power (34 rakes). Others include Brahmani River Pellet (6 rakes) and Odisha Minerals-Adhunik (6 rakes).

Tata Steel iron ore and pellet sourcing – Sept’15 vs Aug’15

*till 29 Sept’15
1 rake approximately carries 3,850 MT
Provisional data
Source: Railways, SteelMint

Pellet Prices in eastern India might fall

Major pellet makers in eastern India raised their prices sharply in 1st week of Sept’15 over increase in sponge iron prices and sufficient bookings. Tata Steel has remained a major buyer of pellets in Sept’15. Increased intake of pellets from the steelmaker also gave a push to the prices. Pellet prices in Odisha were around INR 4, 750/MT (loaded to wagons at Barbil) and around INR 5,000/MT at Jamshedpur.

It seems that pellet prices which have remained high since last few days might undergo a decline as the major buyer is expected to reduce its purchases in the days to come.